Vancouver city council to consider motion supporting 'pod hotels' in vacant office space

A motion coming to Vancouver city council this week aims to clear the way for owners of vacant office space downtown to convert it into "pod hotel" rooms.

"Vancouver has a dire shortage of hotel rooms," said Coun. Sarah Kirby-Yung, who is bringing the motion to council on Wednesday.

Kirby-Yung cited a study commissioned by Destination Vancouver that anticipates the city will have a shortage of 10,000 hotel rooms in the coming years.

"Demand is going to exceed supply by the summer of 2026," she said. "That's coming up fast. It's looming, and pod hotels or capsule hotels are relatively new to us here in Canada and in North America. They're something that has existed in Japan for decades."

Pod hotels are collections of small, private or semi-private sleeping spaces with shared amenities. They're considered a more affordable alternative to traditional hotel rooms.

The thinking underlying Kirby-Yung's motion is that they'll also be quicker and more affordable to build. 

"It can take years to build a stand alone hotel but what's behind this motion is that we're seeing we have surplus of older office space so I think we have ability to utilize some of that where we've got high vacancy office rates," she said.

The Downtown Vancouver Business Improvement Association estimated the vacancy rate for office space at 9.4 per cent in its most recent "State of Downtown" report. 

A similar report from CBRE Group placed Vancouver's rate at 11 per cent as of the fourth quarter of 2023. 

Vancouver has actually fared better than other large Canadian cities in terms of keeping its downtown office buildings occupied as work habits change in the wake of the COVID-19 pandemic.

CBRE's report placed Toronto's vacancy rate at 17.4 per cent, Edmonton's at 22.9 per cent and Calgary's at 30.2 per cent.

Still, Vancouver's rate remains considerably higher than it was before the COVID-19 pandemic, and Kirby-Yung's motion notes that "older office buildings and commercial heritage buildings" are particularly likely to be empty.

The motion directs city staff to report back on options for allowing office buildings to be converted to pod hotels on either a temporary or permanent basis, and what bylaw changes would be required.

The problem, Kirby-Yung said, is that Vancouver has its own building bylaw, which is different from the B.C. Building Code used elsewhere in the province.

"The Vancouver bylaw is very restrictive, and we're looking to clear that roadblock," she said. "There are some proponents that are interested in looking at this opportunity, particularly in downtown Vancouver."